PERTH has trumped Victoria as the second Australian destination for Kuala Lumpur-based low-cost carrier AirAsia X.
AirAsia X, which already flies to the Gold Coast, launched its Perth services yesterday with a 5000-seat sale at $99 one-way.
It will start services in November with six flights a week, increasing to daily services in March.
The airline had earlier been expected to choose Avalon, near Geelong, or Melbourne's Tullamarine as its second Australian port. But AirAsia X chief executive Azran Osman-Rani said the airline was unable to complete negotiations in Victoria before the delivery of the first of its new 390-seat Airbus A330s.
"Avalon still has a way to go in terms of them getting everything set up for them to operate as an international terminal," he said. "Tullamarine has an equally interesting proposal but we do need to finalise some details with them. That could very well be the next destination, but we thought, we've got a plane coming in November and we've got to find a home for it and with the others not quite ready, we'd fly to Perth first."
Unlike the situation on the Gold Coast, AirAsia X faces stiff competition in Perth from other Asian carriers, including low-cost rival Tiger Airways.
Jetstar is also planning to use Perth as a hub for narrow body international operations.
Mr Osman-Rani said he expected the route to be a challenge but he believed AirAsia X's low fares would win out.
"We'll give it a go," he said. "We're looking forward to it and we're starting with $99 and we'll just stick to $99 if that's what it takes."
As well as its two Australian routes, AirAsia X operates five direct return flights a week between Kuala Lumpur and Hangzhou in China and is eyeing routes to Europe.
It also connects with Kuala Lumpur-based network of sister low-cost carrier AirAsia, which has more than 100 routes in the ASEAN region.
The West Australian Government, which helped broker the deal with AirAsia X, estimates the new service could inject almost $100 million into the local economy in its first year.
Tourism Minister Sheila McHale said Malaysia was already one of Western Australia's top inbound markets, with almost 40,000 visitors each year spending $157 million.
"With AirAsia X having the broadest low-cost carrier route network in Southeast Asia and China, the airline is expected to bring an additional 40,000 international visitors to WA in the first year," she said.
Mr Osman-Rani, who will be addressing a Tourism Futures conference next month, said low-cost carriers were helping boost in-bound tourism to Australia.
He said 65 per cent of passengers on the airline's Gold Coast service were now from Southeast Asia or China.
"We're probably looking at closer to 50-50 for Perth," Mr Osman-Rani said. "We're doing extensive marketing in Malaysia, Thailand, Indonesia, Vietnam and China - big full-page ads saying come to Perth via Kuala Lumpur - and that's pretty much where we're going to get the volume."
Asked about the impact of high fuel prices, the airline executive said this was a challenge for all airlines, and AirAsia X would try to maintain its position of being 40-50 per cent cheaper than a full service carrier.